Dangote Cement Net Profit Dips 10% On Rising Production, Finance Costs, Selling Expenses

The board of Dangote Cement Plc, on Sunday presented its unaudited financials for the half-year ended June 30, 2022, just hours before the July 31, regulatory deadline, highlights of which included the fact that turnover is just an earshot from the 2021 full-year numbers; besides the 10.18% drop in profit, despite the 17.01% growth in sales revenue within the period. A review of the numbers showed that production costs, finance costs, as well as selling and distribution expenses took its toll on the bottom-line. The group’s pan-African operations again suffered significant losses, suggesting the need for a rethink. There was also the impact of the huge foreign exchange loss within the period.

According to the result, revenue for the period stood at N808.037bn in the first half of the year 2022, up by N117.493bn from N690.545bn, out of which production cost gulped N322.461bn compared to N276.115bn. This was driven by the N129.957bn costs of fuel and power consumed, which rose from N98.978bn; much more than the N97.009bn that went into materials consumed, up from N93.974bn; among other. This resulted in gross profit of N485.576bn, against N414.43bn.

Administrative expenses increased from N30.709bn to N34.134bn; selling and distribution expenses soared to N135.272bn from N87.575bn, the lion’s share of which was the N111.846bn spent on haulage expenses, from N67.681bn; while other income took a dive from N6.051bn in the corresponding period of last year to N1.601bn; resulting in profit from operating activities of N318.121bn, up from N302.197bn.

Finance income grew from N9.408bn to N11.645bn, after interest income stood at N22.001bn from N9.408bn; while finance costs increased from N30.351bn to N75.232bn, due to the growth in interest expenses from N24.814bn to N34.059bn, and foreign exchange loss from N4.944bn to N40.657bn.

Profit before tax fell from N281.254bn to N264.89bn; income tax for the period stood at N92.786bn from N89.624bn; resulting in net profit of N172.104bn; N19.526bn less than then N191.63bn of the 2021 half-year, representing earnings per share of N10.10, down from N11.21.

A breakdown of the result showed that revenue came significantly from its Nigerian operation just like last year, which accounted for N622.961bn, up from N494.139bn; while the pan-African business contributed N185.056bn, down from N198.497bn in the first half of 2021. Profit from its Nigerian business stood at N222.25bn; with the company suffering a N74.811bn loss in its pan-African operations, almost three times the N27.913bn of the corresponding period of last year.